Yield Mechanics

Understand how csUSDL generates, compounds, and distributes yield across real-world assets, lending markets, and token incentives.

Introduction

csUSDL generates yield from three sources: real-world interest (T-Bills), DeFi lending, and token rewards. These yields are either auto-compounded into the token’s price or claimable by users.

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1. USDL Yield (T-Bill Rebases)

The base yield comes from USDL — a fully backed, regulated stablecoin issued by Paxos. USDL earns interest from a portfolio of U.S. Treasury bills and cash equivalents.

• Yield is distributed via daily rebases by Paxos.

• wUSDL (wrapped USDL) converts this into an accrual model.

• Since csUSDL holds wUSDL, the daily T-Bill yield from USDL accrues automatically and is reflected in csUSDL’s share price.

This yield is auto-compounded into csUSDL and reflected in the convertToAssets() share price.

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2. Lending Yield on Morpho

Coinshift deploys deposited wUSDL into Morpho Blue, where borrowers can take loans against overcollateralized assets like wstETH or cbETH.

• csUSDL earns interest paid by borrowers in real time.

• Lending rates are variable and depend on market utilization.

• If utilization is high, lending APR increases.

This yield is auto-compounded and also reflected in csUSDL’s increasing share price.

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3. MORPHO & SHIFT Token Rewards

In addition to interest, csUSDL holders earn protocol rewards:

MORPHO

• Distributed to suppliers in Morpho vaults

• Claimable separately via the Morpho UI (here explained)
• Rewards are variable and governed by Morpho DAO

SHIFT

• Coinshift’s native governance token

• 5% of total supply reserved for early csUSDL users

• Accrues over time and will be claimable at token launch and per vesting schedule

• Speculative value until trading begins

These rewards are not auto-compounded and must be claimed manually.

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Yield Breakdown (Example)

Yield Source	Compounding	Estimated APR	Notes
USDL (T-Bill yield)	Auto	~4.0%	Rebased daily by Paxos, via wUSDL
Morpho Lending	Auto	up to 2%	Variable, borrower demand-dependent
MORPHO Rewards	Manual	up to 2%	Claimable weekly
SHIFT Rewards	Manual	up to speculation	Accrues pre-launch, claimable later

APRs are indicative and fluctuate over time.

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Summary

• csUSDL grows in value automatically as both T-Bill and lending yields accrue inside the vault.

• Users don’t need to stake, claim, or manage positions — holding csUSDL is enough to earn yield.

• MORPHO and SHIFT tokens are separate, and claimable via external interfaces.